CCAI Newsletter October-22

From the Editor’s Desk

As the battle between Russia and Ukraine continues even eight months after its inception, another war is afoot across the globe in the Energy-front and coal, the fuel source which many thought is well past its prime, has certainly taken the centre-stage in it.

As a major consequence of ongoing Russian war against Ukraine and the subsequent economic actions by the European Union on Russia, large parts of Western Europe have been reeling under a severe energy crisis with winter approaching as Russia imposed restrictions to its natural-gas supply to the continent in retaliation. Increasing Power demand coupled with supply-tightness and general inflation has sent ripples across Europe’s energy market, the effect of which could be felt in Asia, Africa and even North America. The International Energy Agency has termed it a “truly global energy crisis” and said energy bills have become unaffordable for individuals and industries alike in many parts of the globe.

Consequently, many European heavy-weights, who had strongly advocated the demise of coal, are now compelled to take its refuge to ensure energy security as coal has remained the cheapest and most abundantly available fuel source. Denmark, Finland, Germany, France, UK, and many other European nations are delaying closures or reviving decommissioned units and even considering adding capacity. Demand has increased steadily in major Asian coal consumers China and India while there is significant capacity addition of coal fired power in emerging countries like Philippines, Indonesia and Vietnam.

As per analysts, Seaborne coal volumes are unlikely to decline until at least till 2025 amid continued demand in Europe and emerging economies. With Europe expected to ban all imports of coal from Russia, it is possible that the continent will have to draw more cargoes away from Asia, but it may also happen that Atlantic basin exporters, such as Colombia, the United States and Canada, can ramp up shipments. Meanwhile, coal producers are running at full-tilt but clogged supply chains are leading to trouble delivering additional tonnes. All of that is putting steady, upward pressure on prices, which have surged to records in the US, Asia and Europe.

As a result, the next round of global climate talks-CoP27 will be conducted in the shadow of a raging energy-debacle across the globe. While the final text of the Glasgow summit included calls for a “phase-down” of generation from coal-fired facilities without carbon capture and ending coal subsidies, the current scenario may witness a lowering of net-zero emission targets. Despite pledging to end financing for upstream oil and gas through direct funding in 2018, the World Bank has pumped $14.8 billion into fossil fuel projects globally in the period following the landmark Paris climate accord by means of indirect financing.

But the present crisis may also be seen as a turning point, speeding up the world’s transition to green energy. In a glimmer of hope, REPowerEU scheme, which aims to make European Union (EU) countries independent of Russian energy by 2030, is in action while South Africa’s government has sought cabinet approval for $8.5 billion funding from some of the world’s richest nation to transition away from the use of coal as per the COP26 commitments in Glasgow last year. It remains to be seen whether world leaders are able to turn this unprecedented crisis into an opportunity to shift to the idea that investment in “clean” power will pave the path for more secure and affordable energy.

Vol. LI No. 07 October 2022

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CONSUMERS’ PAGE

Present Coal Scenario:

India’s overall coal production in October ’22 has been 67.02 MT which is 9.09 MT more than the previous month. However, overall production in October has reduced by 4.55% on M-o-M basis. In terms of FY2022-23 so far, country’s overall coal production (483.59 MT) has gone up by 7.92% compared to the same period in last fiscal.

Country’s overall coal despatch (67.02 MT) has also shrunk slightly in October compared to same month last year (70.21) MT. Coal despatch to Power Sector has reduced by over 5.5% this month while despatch to Steel, Cement, Sponge-Iron and Others sub-sectors have shown signs of improvement. Coal despatch to CPP sub-sector has plummeted further to nearly 29% in October ’22 compared October ’21. However, India’s overall coal despatch so far this year has grown by 7.92%.

1. Submission by power sector seek ing refund of differential GST amounts alongwith reimbursement for idle freight:

A number of subsidiary coal companies are providing refund against idle freight alongwith the GST components charged by the Railways. However, some of the subsidiaries such as SECL, MCL & WCL and are not providing refund of differential GST amount while providing reimbursement for idle freight.

As the Generators are paying freight charges to railways alongwith GST, non-refund of such a significant amount is leading to massive financial losses for the consumer. Request has been made to respective Subsidiaries and CIL so that differential GST amounts may be refunded as per the standard practice.

ings, wagons are overloaded by the coal company during weighment at the loading points. However, railway makes necessary load adjustments as per permissible carrying capacity (PCC) before despatch of rakes. Therefore, coal quantity mentioned in the invoices issued by the coal companies is often higher than quantity mentioned in the RR. This added further cost to the freight paid by consumers for quantity not delivered.

Request has been made to SECL and CIL to conduct rake loading in such a way so that coal quantity mentioned the invoice may be same with the RR quantity.

4. Submission by Power Sector for reimbursement of complete under-loading charges by coal companies of CIL:

2. Submission by Power Sector regarding refund of ad-valorem charges in credit notes against grade slippage:

A number of Power Sector consumers have pointed out that while refunding the difference in base-prices of coal delivered to the consumers in case of grade slippage, ad-valorem taxes paid by the consumer alongwith advance coal value such as Royalty, DMF, NMET etc. are not being refunded by the coal companies. As grade slippage of coal is a recurrent issue in many of CIL subsidiaries, non-refund of ad-valorem taxes puts extra financial burden on the consumers.

Request has been made to CIL so that Royalty and ad-valorem taxes may be included during issuance of credit notes in case of grade slippage.

In case of underloading of rakes, charges should be borne by the coal companies in full. However, in most of the coal bills full amount is not refunded to the consumers. The coal company calculates underloading charges based on the difference between CC/stenciled capacity and actual weight of coal loaded in the wagons but railway charges freight as per permissible carrying capacity (PCC). In most cases, PCC is more than CC. Therefore, the consumers get a partial amount of underloading charges refunded from the coal companies.

As the responsibility of coal loading lies with the seller and consumers have no role in it, request has been made to CIL to make necessary amendments in the FSA so that consumers may get full refund against underloading of rakes

3. Submission by Power Sector regarding difference in invoiced quantity and Railway Receipt (RR) quantity from SECL:

During coal rake supply from certain SECL sid-

5. Submission regarding financial reconciliation of annual accounts:

As per practice prior to July 2014, rakes destined for one organisation, could be diverted to other organisation. For this reason, railway used to reconcile coal bills as well as freight. However, after July 2014 based on the circular

issued by Railway Board, rakes destined for one organisation cannot be diverted to other organisation. Therefore as per present practice, coal bill reconciliation is not required only freight reconciliation is required.

Request has been made to the Railway Board in line with change of railway operation as stated above, timely reconciliation of outstanding amount may please be considered so that consumers do not have to wait indefinitely.

6. Request for effective utilisation

grade coal available in different CIL Subsidiaries by supplying it to Industrial Sector:

Industries in general require low ash coal as high-ash coal lowers the reactor productivity, increases the fuel consumption rate and generally has a deleterious effect on solid direct reduction process. For every one percent increase in the ash content of coal, productivity of the industries come down at least by 2 percent in the ash range of 20-30 percent. The qualitative requirements of coal in both cement and sponge iron sectors are specified in the Indian Standard (IS) with recommended ash range of 24-27% for efficient usage in these industries.

It is seen that G2-G7 grades of coal in India have

ash content within the recommended range specified in the IS standard but in lower grades of coal, ash content is much higher. As CIL produces around 15% of G2-G7 grades out of its total production, it is requested to MoC to ensure that high-grade and low-ash coal available in CIL mines be supplied to the Industries, so that such precious resources can be preserved and utilised scientifically.

II sidings of MCL:

NRS Consumers procuring coal from SPUR – I & II sidings of MCL are struggling due to non-supply of a significant number of e-Auction rakes for more than one year. Some rakes are kept pending despite being higher on the indent seniority list. Thus, a huge amount of funds of these consumers are stuck with the coal company in the form of coal value advance for a prolonged period, limiting their resources to book coal from other (CIL auction/open market/imported) sources.

Request has been made to MCL and CIL to prioritise supply of long-pending rakes from MCL for NRS consumers at the earliest possible.

of higher

7. Submission by NRS consumers requesting immediate release of longpending e-Auction rakes from SPURI&

POWER

THER MAL

India to see biggest jump in energy demand globally: IEA

India is likely to see the world's biggest rise in energy demand this decade, with demand climbing 3 per cent annually due to urbanisation and industrialisation, the International Energy Agency (IEA) said. While the push for renewable energy will see it meeting as much as 60 per cent of the growth in demand for power, coal will continue to meet a third of overall energy demand by 2030 and another quarter will be met by oil.

Even though India continues to make great strides with renewables deployment and efficiency policies, the sheer scale of its develop-

ment means that the combined import bill for fossil fuels doubles over the next two decades, with oil by far the largest component.

In India, coal meets a third of growth with demand rising above 770 million tonnes of coal equivalent (Mtce) by 2030, and continuing thereafter before peaking in the early 2030s. Oil demand meets a further quarter of the energy demand growth and rises to nearly 7 million barrels per day by 2030 from 4.7 million bpd in 2021. Coal generation is projected to continue to expand in absolute terms, peaking around 2030, though its share of electricity generation falls from just below 75 per cent to 55 per cent over this period.

The public sector companies – right from generation to transmission and distribution – have been the bedrock of India’s electricity sector for several decades. However, in the last decade or so, it is the private sector that has also made immense contribution with sizeable investments, timely execution of projects and research and development. The government has also ushered in efficiency and cost optimisation in the sector by doing away with archaic models like Regulated Tariff Mechanism or nomination route with Tariff Based Competitive Bidding, which has allowed private capital to participate in India’s energy sector’s growth story.

Since the introduction of TBCB model in 2010, more than 65 projects amounting to Rs 85,000 crore have been awarded through the TBCB route with competitive bidding by both private and public sector companies. Many have successfully implemented transmission projects in strategically sensitive locations like North-East, J&K, and that too, within truncated timelines of 2-3 years. Even discovery of tariff from competitive bidding route is usually 30-40% lower as compared to cost-plus method, translating into government funds being efficiently utilized in the larger interest of consumers.

This model has also led to the creation of a vast ecosystem of developers, technology providers, and financial products. Since the entire process is transparent, it also sends a positive signal to the investor community, thereby increasing India companies’ access to global debt and equity capital.

Thermal capacity build-up still key to energy security

Rising power demand following the post-covid opening up of the economy has brought thermal power generators into focus. While renewable capacities are growing at a fast pace, the dependence on thermal and hydropower will continue, considering that renewables contribute in low double digits, and may not be able to

meet peak seasonal demand, said analysts. Hydropower generation is seasonal and gasbased generation has been impacted by rising natural gas prices. Hence, thermal power capacity addition is likely to continue, and even some stressed assets may find takers.

Power-generation data reflects the significance of thermal power plants in the current scenario. While the overall power generation in India surged 11.9% from a year ago so far in FY23, coal-based power generation was up 12.8%, according to Elara Securities data. In September, coal-based thermal power generation rose 13.4% from a year ago against the 0.3% rise in September 2021. Thermal capacities can increase by 15-20 GW over and above those under implementation.

Govt mulls 233 GW new transmission capacity

The Ministry of Power has said the government is mulling electricity transmission for renewable energy capacity of about 233 GW, latest by 2030, across the country. "Planning of transmission system for integration of additional 52 GW potential REZ (renewable energy zone) by 2026-27 have been carried out...transmission schemes for another 181.5 GW... by 2030 have been planned and the same would be taken up for implementation in a progressive manner," the ministry told members of Parliamentary Consultative Committee.

The initiatives for integration of non-fossil fuel energy are implementation of green energy corridors, transmission system for ultra mega solar power parks, transmission system for 66.5 GW renewable energy zones by 2022 and establishment of 13 RE management centres (REMCs) to address variability and uncertainty of RE (renewable energy) generation.

The national grid transmission system has added transmission lines of 1,71,149ckm since 2014-15 and transmission capacity of 6,03,916 MVA since 2014-15. At present, the installed capacity of the national grid is 404 GW and the peak demand met is 216 GW.

India’s power sector needs competitive bidding to maintain its growth momentum

India's power demand set to double by 2030: R.K. Singh

India's power demand is set to double by 2030, which will require capacity addition and this will entail huge capital investment, Minister for Power R.K. Singh said.

He also noted that to achieve energy transition towards green hydrogen, distribution companies or DISCOMS across the country will have to follow prudent and sustainable financial practices to ensure that they are viable.

Singh made these observations while inaugurating the state power ministers conference in Udaipur.

"Capital investments would also be required for modernising the power systems and promoting new technologies like green hydrogen, storage, offshore wind etc. to help India achieve its energy transition trajectory. To this end, it is absolutely imperative that the DISCOMS across the country follow prudent and sustainable financial practices to ensure that they are viable," he said.

He also highlighted the achievements made in the recent years in power sector in terms of surplus generation capacity, development of national grid, universal access to all households and improved supply to rural areas.

40 million tonne of coal stock will be available with thermal power plants by March: Coal minister

Union coal minister Pralhad Joshi announced that as much as 40 million tonne of coal will be available with thermal power plants (TPPs) by March next year, a feat which the government has not been able to achieve until now resulting in repeated power crises in several parts of the country during peak summer or monsoon season.

The minister’s announcement is significant because as TPPs in India managed to have a combined reserve coal stock of only about 2425 million tonne, which is enough to generate power for about 10 days.

India faced its worst power crisis in over six

years in April this year due to higher electricity demand because of a sudden heatwave which spiked the country’s power demand to an all-time high of 210,793MW on June 9. This happened despite record coal production by CIL in fiscal 2021-22. The steep electricity demand caused widespread power cuts in April, as the authorities scrambled to manage demand amid dwindling coal supplies.

Coal India asked to enhance supply to thermal power plants

With the festival season round the corner, Coal India Ltd has been directed by the government to scale up dispatch to thermal power plants. Coal companies were advised to enhance supplies to thermal power plants to help them meet the growing electricity demand in the coming few weeks.

During the first half of 2022-23, Coal India had dispatched 285.6 million tonnes of dry fuel to the power sector, which is a growth of almost 17 per cent over previous year. As a result, coal stock at thermal power plants is now three times more than last year's stock, official sources said. Coal India Ltd's (CIL) production during the first half of the current fiscal was 299 million tonnes.

Though there is adequate coal supply with power plants this year, Government wants to ensure that there is no repeat of last year's situation and hence the meeting was held, sources said.

Regulator can’t revise power tariff payable to discom in the guise of prudence check: SC

The Supreme Court said the electricity regulator, DERC, cannot revise or re-determine the already fixed power tariff for discoms in the guise of “prudence check and truing up” as it would amount to amending the rates to be levied from consumers.

Prudence check relates to scrutiny of reasonableness of capital expenditure incurred or proposed to be incurred, while a true up claim is the expenditure incurred by a utility over and above the annual revenue.

“Revision or re¬determination of the tariff already determined by DERC on the pretext of prudence check and truing up would amount to amendment of the tariff order, which can be done only as per the provisions of sub¬Section (6) of Section 64 of the 2003 Act within the period for which the Tariff Order was applicable,” Justice Nazeer, writing a 54-page judgement, said.

Power Grid acquires SPV to build transmission project

State-run Power Grid Corporation of India said it has acquired 100 per cent equity in a special purpose vehicle (SPV) to build an inter-state transmission project for eastern and northeastern regions. The SPV was acquired for an aggregate value of about Rs 7.04 crore, including 50,000 equity shares at par at Rs 10 each along with assets and liabilities of the company as on the acquisition date (October 10).

However, the acquisition price is subject to adjustment as per the audited accounts of the company, it added.

The inter-state transmission system comprises upgradation works at 400/132kV Banka (Bihar) with implementation schedule of 24 months and establishment of 220kV D/C transmission lines passing through Assam and Arunachal Pradesh and bays extension works with implementation schedule of 36 months.

Smart meters helping discoms improve revenue, cut losses

Rapid roll-out of smart meters for power consumers are leading to a sharp improvement in the financial parameters of discoms (distribution companies), initial reports on the implementation of the Centre's Rs 3.3 lakh crore scheme in states show.

According to a power ministry presentation made at a recent brainstorming session of state power ministers, discoms showed a sharp improvement in billing efficiency, recovery of arrears and actual consumption getting recorded in states replacing old meters with smart meters in earnest.

This resulted in average monthly collection per customer rising by up to 65%. At the same time, the consumption figure per consumer too spiked by up to 42%, indicating the quantum of losses suffered by discoms earlier due to slippage - or simply theft. Around 50 lakh conventional electricity meters have been replaced with the smart new-age prepaid meters across the country, according to official figures.

RENEWABLES

India urges utilities to expedite biomass co-firing

India's power ministry has reiterated that thermal power plants must meet a minimum of 5pc biomass co-firing, with non-compliance to result in penal actions. Indian utilities were required to have been co-firing at least 5pc biomass pellets by October this year.

Under the power ministry's policy, co-firing should be raised to 7pc from October 2023 for two categories of power plants those with a bowl mill or with a ball and race mill. The policy for co-firing will be valid for 25 years or until the useful life of a power plant ends, whichever is earlier. The biomass pellets must be primarily made up of agricultural residue, and the policy encourages domestic sourcing.

Only 39 thermal power plants with a combined capacity of 55.39 GW have started co-firing, and have used 83,066t of biomass so far. Tenders to source 106mn t of biomass are at various stages, while orders have been placed for 4.34mn t by a total of 35 power plants. Utilities should make efforts to complete the procurement process for existing tenders as soon as possible. Plants must arrange to source shortterm supplies until tenders are finalised, as the ongoing harvesting season will expand biomass availability, the power ministry said.

Melding non-fossil energy sources Govt to set up transmission system for renewable energy zones by 2022

The Power Ministry is setting up transmission systems for renewable energy zones (REZ) with 66.5 gigawatts (GW) capacity by the current calendar year to integrate non-fossil fuel energy sources with the national grid.

Besides, it will also establish 13 RE management centres (REMC) to address the variability and uncertainty of its generation and is planning a transmission system to integrate an additional 52 GW potential REZ by 2026-27.

During a meeting of the Parliamentary Consultative Committee attached to the Ministry, the Power Minister R K Singh apprised the committee members of the steps being taken by the government towards creating a ‘One Nation, One Grid, One Frequency and One National Load Dispatch Centre (NLDC)’, which will help create a single power market for the world’s third-largest energy consumer.

This would also help india reduce its imports of ammonia and urea by almost six million tonnes.

Centre denies project import benefit for solar projects

The union government has shut the project import route used by solar project developers to circumvent the basic customs duty on solar modules and cells and pay lower duties. In a notification dated 19 October, the union ministry of finance announced an amendment to the Project Imports Regulations, 1986 to exclude solar power projects from the purview of the norms.

The project imports scheme is meant to facilitate import of machinery, instruments and apparatus among others required for setting up a new unit or for substantial expansion of an existing unit. These can be imported at a concessional duty of 7.5%.

2025: MoU details

For the first time in our history, India could export green-renewable energy from 2025, with shipments going to Singapore. A Memorandum of Understanding (MoU) has been signed between India’s renewable energy company Greenko and Singapore’s Keppel Infrastructure to explore opportunities in green hydrogen from India. The two companies are reportedly working towards an annual contract of 2,50,000tonnes to be supplied to Keppel’s 600 Mw plant in Singapore.

Greenko’sMoU with Keppel, follows the company’s September deal with South Korean steel and power producer, Posco, to supply one million tonnes of green ammonia per year. Delivery is expected to begin from 2025-26 only. The report states that Greenko plans to produce 3 million tonnes of green ammonia which will cater to both the domestic and export markets.

India imposed basic customs duty (BCD) of 40% on solar modules and 25% on cells with effect from 1 April in a bid to cut imports from China and boost domestic manufacturing. But several solar developers were tapping something called “project import scheme to avoid paying high duties on cells and modules. Several solar power developers seeking ways to avoid paying the duties came up against the union government that appears to be determined to plug any such circumvention.

India and France are re-elected as President and Co-President of the International Solar Alliance (ISA) at the fifth general assembly of the body. Union Power and New & Renewable Energy Minister R K Singh will be the President of ISA while ChrysoulaZacharopoulou, France's Minister of State for Development, Francophonie and International Partnerships, will be copresident of the International Solar Alliance, ISA Director General Ajay Mathur said.

ISA's mission is to unlock USD 1 trillion of investments in solar by 2030 while reducing

In a first, India could export green hydrogen to Singapore from

India, France re-elected as President, Co-President of International Solar Alliance

the cost of the technology and its financing. It promotes the use of solar energy in the Agriculture, Health, Transport and Power Generation sectors.

The ISA will soon operationalize Solar Facility to crowdsource investments from various donors across the globe and proposed projects in Africa will be able to purchase payment guarantees or partial insurance premium from these funds. The ISA Assembly also approved the SolarX Grand Challenge, which is planned to focus on innovation and start-ups, particularly decentralized solar energy applications that contribute to livelihoods, such as agriculture, health, and small-scale industrial applications.

Meghalaya signs agreement with NEEPCO to commission hydro power plants

The Meghalaya government signed an agreement with the state owned North Eastern Electric Power Corporation Limited (NEEPCO) for developing three hydro electric projects.

These projects will be of 235 MW. Deputy Chief Minister PrestoneTynsong, who also holds the Power Department, after the agreement signing ceremony, said that the NEEPCO under the agreement would set up the Umiam stage 1, stage 2 and stage 3 hydro power plants.

The Umiam stage 3 is in the final stage and NEEPCO is expected to start the implementation process soon. Both Stage-I and Stage-II would cost around Rs 1,750 crore with 70 per cent loan.

MNRE issues draft National Repowering Policy for Wind Power Projects, 2022

The Ministry of New and Renewable Energy (MNRE) recently issued the revised draft of the National Repowering Policy for Wind Power Projects, 2022, as the majority of old wind power projects with sub megawatt scale wind turbines are yet to be empowered. With the objectives of the Repowering Policy are optimum utilization of wind energy resources by maximising energy

yield per sq km of the project area and utilising the latest onshore wind turbine technologies.

The National Institute of Wind Energy (NIWE) has estimated the repowering potential of the country to be 25.406 gigawatt (GW) considering wind turbinesbelow capacity 2 MW, added the Ministry circular in this regard.It said that NIWE will issue a repowering potential map of the country considering below 2 MW capacity wind turbines.

The policy lays out conditions for developers to go for repowering of their old wind turbines. The eligibility criteria for wind turbines for repowering includes – all turbines identified under the relevant BIS Act, wind turbines with capacity below 2 MW, turbines that have completed their design life, and a set of existing wind turbines over an area.

NLC India inks MoU with National Institute of Wind Energy for onshore, offshore wind power projects

NLC India Ltd., a Public Sector Undertaking (PSU) under the Ministry of Coal, has entered into a memorandum of understanding with the National Institute of Wind Energy (NIWE), an autonomous Research and Development institution under the Ministry of New and Renewable Energy (MNRE), for strategic collaboration in developing onshore and offshore wind power projects in the country.

NLCIL has taken the initiative to contribute towards national green energy targets and energy transition goals. The MoU is aimed at synergising the technical expertise of NIWE and the project development capabilities of NLCIL. The MoU also envisages reaping the benefits of repowering operating wind turbines and better operation and maintenance practices in upcoming, as well as operating wind power projects.

In addition, NIWE will offer competency-based training for NLCIL in the recent developments in the renewable energy sector.

DOMESTIC

COAL

India’s coal production hits fresh milestone of 382 mt in H1FY23

India’s coal production for first half of FY23 reached a new milestone of 382 million tonne (mt), according to CareEdge Research. Domestic coal production has crossed 380 million tonne (MT) during H1FY23 (April–September), registering around 21% y-o-y growth over the same period in FY22, on account of a low base.

This increased production by Captives has helped in meeting the demand-supply gap in the domestic market. The contribution of Captives in total domestic coal production during H1FY23 has increased to around 14% from an earlier 11% during H1FY22," the report said.

The coal despatch to the power sector, which accounts for the largest coal despatch has increased by around 17% y-o-y. As of August 2022, the energy deficit in the country has come down to 0.4% (465 million units) as against 0.5% (638 million units) in August 2021. While coal production has increased, electricity requirement has declined owing to good monsoon during the months of June - August. CareEdge Research estimates the coal production to continue to rise and reach around 500 MT in the second half of FY23

Coal import to be stopped by 2024: PralhadJoshi

Coal minister Pralhad Joshi said that the import of dry fuel which has declined considerably will be stopped by 2024.

Joshi also complemented CAG's office for bringing out the first ever compendium of asset account on mineral assets of the country. The minister said that the report presents comprehensive picture of the mineral resources spread across different states in the country.He said that the compendium will help in further strengthening sustainable mining process which is of great importance for ecology and future generation.

Collating the information of the state asset accounts, the government accounting standards advisory board has prepared the compendium of asset accounts on mineral and energy resources in states.

PSUs should compete with private sector coal mine auction:

Pralhad Joshi

Union Minister of Coal, Mines and Parliamentary Affairs Pralhad Joshi has called upon public sector undertakings (PSUs) to compete with private sector coal mine auction and early production.

Addressing the National Coal Conclave and Exhibition, the minister said that despite unprecedented increase in global prices, Coal India Ltd (CIL) has not raised domestic coal prices. The state-owned miner has stepped up production substantially in recent past and managed to overcome coal shortage faced by thermal power plants.

Joshi said that 64 coal mines have been successfully auctioned so far under commercial auctioning launched in 2020. “All efforts are in full swing to stop import of thermal coal by 2024 and incentives are being given for early production of coal under commercial auctioning. Captive mines are likely to produce 125-million-ton (MT) coal this year."

Amid coal imports, government says production to touch 900 million tonnes this fiscal

Even as the government has been forced to import 8 million tonnes of coal for this fiscal, Minister for Coal Pralhad Joshi said that India's dry fuel production will touch 900 million tonnes in the current fiscal.

The target is ambitious, considering the fact that CIL's production in 2021-22 was 622 million tonnes.However what is more significant is the fact that owing to a huge spike in demand, for the first time ever in its history, CIL - which is the largest producer of dry fuel in the country - has been forced to import the commodity.

In June, CIL had issued three tenders for importing 2.4 million tonnes and 3 million tonnes each of coal, respectively.While the tender for importing 2.4 miliontonnes of coal was for the July-September period of this fiscal, the other two tenders for seeking 6 million tonnes of dry fuel were till June 2023.Till now, CIL has imported 300,000 tonnes of coal, sources said.

CIL firms up Rs 11k-crore investment for eco friendly coal handling

To strengthen its network of eco-friendly coal transportation, Coal India Limited (CIL) has initiated 17 more first mile connectivity (FMC) projects under phase-III at an estimated cost of Rs 11,000 crore. These projects have been planned for a loading capacity of 317 million tonne per annum (MTPA).

The company is preparing to float tenders for the latest projects by FY 2025. Commissioning of the projects would be in two years thereon by FY 2027. These projects are in addition to existing 44 such projects that the company is actively pursuing under two phases, a CIL executive said.

Catalyzed by positive results shown by a pilot study, in two of its open cast mines, on environmental and economic benefits

of loading through FMC projects, CIL is pursuing this mode actively. Results have indicated significant reduction in particulate matter, CO2 and other gaseous emissions compared to despatch through rail sidings. Of the identified 17 projects MCL and CCL would put up 6 each followed by SECL with 3 projects. WCL and BCCL would have a solitary project each

India's 99 new coal mine projects conflict with net zero by 2070:

GEM

A temporary coal shortage has emboldened the Indian government to press ahead with plans to develop 99 new coal projects with production of 427 million tonnes per year (mtpa), a briefing by Global Energy Monitor (GEM) said.

Land for new coal projects continues to be auctioned despite the government's pledge to achieve net zero emissions by 2070 and despite the fact that 36 per cent of capacity at operating mines goes unused.

Key findings include underutilized capacity at India's existing mines (433 mtpa) is actually greater than projected capacity from India's 99 new coal projects (427 mtpa), demonstrating that these new projects are unneeded. India's 427 mtpa of planned new coal mine capacity place it second in the world after China with 596 mtpa.

In some major mining regions, like Jharkhand and Odisha, the industry has over 100 million tonnes in unused capacity at active mine sites, amounting to over 40 per cent of unused mine capacity in those states.

Import duty removal hurting business, say Met Coke producers

Indian manufacturers of metallurgical coke, a key raw material for iron and steel manufacturing,

are crying foul over the removal of import duty on the product as it makes them less competitive with overseas players.

The Indian Government removed the 5% import duty on coke in May this year to reduce the input costs for steelmakers in its wider efforts to arrest steel prices and the resultant domestic inflation. A 2.5% import duty on coking coal, which is processed to make metallurgical coke, was also removed.

The Indian Metallurgical Coke Manufacturers’ Association (IMCOM), a lobby for the industry, said that while the move reduced their input cost by 2.5%, it suppressed their selling price by a larger quantum of 5% given the competition from imports.Coke manufacturers still have to pay a cess of Rs 400 per tonne on the import of coking coal, which is not applicable on the direct import of coke, further tipping the balance in the favour of overseas coke makers, the lobby group group said

gasification by 2030’

Union Minister of Coal and Mines Prahlad Joshi has stated that the Centre is committed to gasification of 100 million tonnes of coal by 2030 for quality power generation.

A memorandum of understanding was signed recently for the purpose wherein 50% rebate would also be given in commercial coal mining for it and the Centre had earmarked Rs. 6,000 crore in the budget for performance-linked incentive scheme. The government was planning to showcase it as a success story, he said.

On the road for coal and energy with sustainability, he said coal imports were coming down for the last six-seven years and the production was going up. He explained that from 572 million tonnes of production in 201415, it had reached 817 MT in 2021-22 and it was expected to be 900 MT for 2022-23.

‘Govt committed to 100 MT

RAILWAYS & SHIPPING

Coal Ministry Takes up 68 First Mile Connectivity Projects for Seamless Evacuation of Coal

To strengthen India’s energy security and to realiseAtmaNirbhar Bharat by replacing imported coal with domestically mined coal, the Ministry of Coal has set a target to produce 1.3 billion ton (BT) in FY25 and 1.5 BT by FY30. The development of coal transportation that is costefficient, fast and environmentally friendly is an important goal of the country.

Ministry of Coal has formulated a strategy to develop an integrated approach for eliminating road transportation of coal in mines and has taken steps to upgrade mechanized coal transportation and loading system under 'First Mile Connectivity' projects. Coal Handling Plants (CHPs) and SILOs with Rapid Loading Systems will have benefits like crushing, sizing of coal, and speedy computer-aided loading.

Ministry of Coal has undertaken 51 first mile connectivity (FMC) projects (44 – CIL, 4- SCCL & 3 – NLCIL) of 522 million ton per annum (MTPA) capacity, out of which 8 Projects (6CIL & 2-SCCL) of 95.5 MTPA capacity have been commissioned. These 51 projects will cost Rs 18000 crores and all of them will be commissioned by FY2025. Since CIL has taken up new projects in production of coal, it has been proposed to take up additional 17 FMC projects with capacity 317 MT to be implemented during FY20-27.

“With the commissioning of dedicated freight corridors, along with a target to increase the share of freight transport through the railways, the Indian Railways plans to add 90,000 wagons," the report said.

According to an Icra study on the rail infrastructure sector, the combined manufacturing capacity of rail wagons in India is estimated at 35,000–40,000 units per annum, which has faced challenges related to the underutilisation of capacities in the past.

This will provide ample orders for the wagon manufacturers, resulting in an improvement in the overall capacity utilisation to 70-80% in the medium term from a modest sub 40% in the past. The bulk procurement of wagons is expected to provide a cost advantage to the government and better revenue visibility to the wagon manufacturers.

Indian Railways weighs stricter wagon-booking rules

The Indian Railways is proposing to tighten wagon booking norms for freight movement, in a crackdown against 'indent mafia'. An indent is a booking demand raised by a customer seeking to use the railway wagons for transporting commodities.

The Railways is now proposing to penalise those furnishing false information. It had earlier made submission of Letter of Credit (LC) details mandatory for placing indent for goods traffic for Bangladesh.

"It was brought to our notice that indents were placed well in advance to corner wagon availability. These 'indent mafia' of sorts would then sublet the wagons, at a premium, to exporters desperately seeking to move their goods to Bangladesh," a senior government official said.

Indian Railways plans to add 90,000 wagons by 2025, a move that will provide a fillip to the domestic wagon manufacturing industry, a report by rating agency Icra said.

The move comes following representations from exporters about large pendency of indents with the railways for Bangladesh. The ministry of commerce and industry had also taken up the issue and sought a review of the policy.

With focus on freight, railways plans 90,000 wagons additions by 2025

Traffic movement

ports grows 14.6% in September

Cargo handled at India’s major ports grew 14.6% in September on a year-on-year basis to 61.7 million tonnes.

The government data released by the ministry of ports, shipping and waterways showed that coastal cargo – from an Indian port to another – handled at major ports during September increased by 11.5% to 13.64 million tonnes from the previous year.

The overseas cargo handled at major ports also increased by 16% to 48 million tonnes from last year.

In the release, the ministry said, “Maritime transport activity is driven by developments in the world economy, viz, growth in world output and trade. Thus, volume of seaborne cargo traffic handled by ports is mainly shaped by the levels and changes in both the global and domestic activity. The maximum cargo traffic in September came from petroleum products, thermal coal, iron ore, LPG/LNG, edible oil, fertilizer, iron & steel, food grains, sugar and others

Gujarat's Surat district, Modi said in the past, India had to import high grade steel for the defence sector, but scenario has changed now. Now, however, steel used in making 'INS Vikrant' (first indigenous aircraft carrier) was made in India, said the prime minister.Due to everybody's efforts in the last eight years, the Indian steel industry has become the second biggest in the world, he said

Steel exports slump in September

Engineering exports fell 10.85 per cent in September to $8.4 billion because of a fall in demand from the EU and China and the imposition of duties on steel.

Engineering exports to the EU registered a 6.3 per cent year-on-year decline in September to $1.611 billion, while shipments to China slumped 64.5 per cent to $202.61 million.

Germany, Italy, Belgium and Spain were among the countries in Europe which registered a decline in imports.

STEEL

Prime Minister NarendraModihas said India has set a target to double the crude steel production capacity from 154 million tonnes per annum now to 300 million tonnes per annum in the next 9 to 10 years in an order to boost indigenous capabilities.

In his virtual address as the chief guest at the "bhoomipujan" of expansion of ArcelorMittal Nippon Steel India's flagship plant at Hazira in

“This decline can be majorly explained by the falling steel exports — in September alone exports of iron and steel came down more than 60 per cent and in cumulative terms, the drop was more than 30 per cent,” EEPC India chairman Arun Kumar Garodia said.

He said this decline had been a direct result of the 15 per cent export duty on iron and steel products applicable since May 21, 2022

Exports necessary for steel players expanding capacities

at India’s major

India's steel industry now 2nd biggest, target is to double crude steel output in 10 years: PM

told PTI. His comments assume significance as steel players are looking up to the government for relief in the form of roll back of the duties levied on steel exports.

On May 21, the government hiked the duty on exports of iron ore by up to 50 per cent and for a few steel intermediaries to 15 per cent. In line with the government’s 300 MT steel making capacity target, other steel players like Tata Steel, JSW Steel, SAIL and JSPL are also expanding their capacities to meet the goal. AMNS India has commenced aRs 60,000-crore expansion project to scale up its Hazira plant capacity to 15 million tonne (MT) from 9 MT at present.

The project will add another 6 MT capacity and suddenly one can not increase its market share proportionally, the CEO said. “Till then you need to export. I imagine the government of India will take care of the export duty on steel,” Oommen, who is also the President of the apex Indian Steel Association (ISA), said

construction activities were also impacted due to the extended monsoon. Further, the rise in power and fuel costs, which contributes to about 25% of the total costs, also played its part. So, both the levers impacted the sector,” NileshNarwekar, CEO of JSW Cement said.

The fall in demand is generally about 15-20% in Q2, but this time it was “much higher”, another sectoral expert said.While companies such as Ambuja Cements, UltraTech Cement and Shree Cement posted lower net profits, ACC posted a net loss during the second quarter Operating and net profit for cement producers fell sharply year-on-year in the second quarter, owing primarily to higher power and fuel costs and only a marginal increase in prices and realisations. Imported coal (FOB Australia) and domestic petcoke prices have risen by over 125% and 35% on-year, respectively, in Q2, leading to power and fuel costs surging through the roof

JSW Cement to invest Rs 3,200 crore to set up 5 MTPA capacity in central India

Cement makers’ net slips on rising fuel & power costs, falling demand in Sept quarter

Costlier fuel and power supply along with a decline demand hit the cement sector in the September quarter, with manufacturers posting lower net profit and some even slipping into losses. With demand picking up, however, as construction activity resumes after the monsoon, the next two quarters are expected to be good for the sector.

“The second quarter is a traditionally weak quarter due to the rains, and this time

JSW Cement said it will invest more than Rs 3,200 crore to set up two greenfield cement manufacturing facilities having a total manufacturing capacity of 5 million tonnes per annum in central India. The company, part of the USD 22 billion JSW Group, will set up an integrated greenfield cement manufacturing facility in Madhya Pradesh as well as a split grinding unit in Uttar Pradesh.

"The combined cement capacity across both these units will be 5 MTPA," the company said in a statement.It plans to invest more than Rs 3,200 crore to set up the greenfield cement manufacturing facilities.

The proposed investment will be for an integrated cement plant with 2.5 MTPA (Million Tonnes Per Annum) clinker capacity, 2.5 MTPA grinding capacity, 15 MW Waste Heat Recovery System, a modern residential colony in Madhya Pradesh and a 2.5 MTPA grinding unit in Uttar Pradesh.

GLOBAL

Energy crisis revives coal demand and production

High natural gas prices and global competition for the fuel have driven more demand for thermal coal for power generation this year as countries try to wean themselves off Russian energy supplies and seek relatively cheaper alternatives. Some countries are reopening mothballed coal plants to secure enough energy for this winter, while others are boosting production as they seek considerable profits from exports.

In Europe, Bosnia and Herzegovina endorsed in March a plan to extend the lifespan of Tuzla 4 and Kakanj 5 coal-fired thermal power plants by the end of 2023. While in Denmark, the government in October ordered Orsted to continue and resume operations at three of its oil and coal-fired power stations to ensure electricity supply. Finnish utility Fortum plans to add 560

megawatt (MW) of capacity by reactivating an idle coal-fired power plant on the country’s west coast. Germany’s cabinet passed two decrees to prolong the operation of sizeable hard coalfired power plants and bring back idled brown coal capacity to boost supply and network reserves.

In Africa’s Botswana, the government has estimated that demand from Europe could reach more than 50,000 tonnes a month. European countries, scrambling to secure alternatives to Russian coal, imported 40 per cent more coal from South Africa’s main export hub in the first five months of this year than over the whole of 2021. Meanwhile, Tanzania expects coal exports to double this year to around 696,773 tonnes, the country’s Mining Commission told Reuters, while production is expected to increase by 50 per cent to about 1.365 million tonnes.

– analyst

Seaborne coal volumes are unlikely to decline until at least mid-decade amid continued demand for the fuel, notably in Europe and emerging economies, the head of research at shipbroker Arrow said.

Just under 1bn tonnes of thermal coal was shipped around the globe last year, with volumes this year having already reached just over 800m tonnes, according to estimates from dry bulk data provider DBX.

“The European coal burn will remain very profitable in the medium term and that will require more moving into Europe,” Cetinok said, noting that clean dark spreads – the profit margin for burning coal to producer power –were “astronomically high”.

stocks are now at an historic high, and the buying spree has dampened amid lower power demand due to the extreme prices and general fall in industrial demand.

Russia has continued selling coal with huge discounts, forcing other producers to lower prices to keep market shares in the countries not taking part of the EU-US sanctions against Russia. The fall of many emerging market currencies to the US dollar has also pushed the coal price downwards. Gas and EUA prices have also fallen, adding to the bearish sentiment.

The same geopolitical factors as last month are dominating the energy markets. The persistently-high inflation is driving the agendas of the central banks with higher interest rates, stating they will push even harder despite a looming recession. As industry and citizens save energy due to the high prices, demand in many markets is contracting sharply.Awaiting new Chinese growth packages, the World Bank cut growth of the world’s largest consumer, China. The oil price is seen in a wide range of US$85-115 driven by geopolitics, recession fears and with OPEC watching.

Coal finally followed the overall energy complex downwards. Europe has been buying erratically to secure fuel stocks for the winter as coal was by far cheapest fuel. Different logistical issues in the export countries kept prices high. ARA

fired power stations

Shadow Climate & Energy Minister Ted O’Brien says the Australian government needs to stop encouraging the “premature closure of coal fired power stations” when there is “no guarantee of a replacement being there in time”.

“They should be ensuring the capacity mechanism is up and running with gas in it,” Mr O’Brien told Sky News host Chris Smith.

“They need to start setting up renewables for success, not failure – at the moment they are putting pressure on renewables that defies engineering and economics.”

Queensland will remain a "dominant" exporter of metallurgical coal for years to come despite the state government's clean energy push, a Bowen Basin coal producer says. The Queensland

Coal supply to remain strong until at least 2025

Coal and gas lower, while petcoke continues upwards, driven by demand from China and India

Australian Government needs to ‘stop encouraging’ premature closure of coal

Coking coal production set to increase in Queensland despite clean energy plan

government recently announced a 10-year clean energy plan, in which it committed to dropping its reliance on coal-fired power by 2035.

Bowen Coking Coal has two metallurgical coal mines in central Queensland, with two more coal projects underway in the region as well.

While demand and price for Australia's metallurgical coal rose to record highs earlier this year, they have since eased, with prices forecast to drop further.According to the federal government's latest Resources and Energy Quarterly report, metallurgical export earnings surged to $66 billion in 2021-22, but were expected to ease to a still high $44 billion by 2023-24.Australia's metallurgical coal exports were also set to reach 180 million tonnes by 2023-24, up from 171 million tonnes in 2020-21.

Indonesia has identified 32 older-generation coal-fired power plants for possible closure, a step that could help the nation meet its key climate target of net zero emissions by 2060, a senior minister said. This could potentially see some plants closing 5 to 10 years before the end of their operational lifespan.

Indonesia last year set a goal to achieve netzero emissions by 2060 to help limit global warming to 1.5 deg C above pre-industrial levels. Burning coal is the largest source of mankind’s greenhouse gas emissions.

Floods cut

access

to Australia’s Whitehaven coal mines

Flooding has cut access to some sites owned by Australian coal mining firm Whitehaven, as the Namoi River burst its banks near the New South Wales towns of Gunnedah and Narrabri.

Whitehaven operates the 12.5mn t/yrMaules Creek thermal and coking coal mine and the 6mn t/yrNarrabri thermal coal mine in the region, while Japan's Idemitsu operates the 7mn t/ yrBoggabri thermal and metallurgical coal mine.

Whitehaven, which saw a dip in its July-September output because of flooding, has been operating helicopters to enable small shift changes while access roads remain flooded and has increased coal haulage using contractors at Maules Creek during dryer periods. Its underground Narrabri mine has fewer operating issues from the rain but still has access problems.

But achieving this target is tough because of generous state subsidies for coal and attractive power purchasing agreements with plant owners. The nation remains heavily reliant on subsidised coal for power generation and also offers power purchasing contracts that guarantee a fixed fee to some plant owners regardless of the amount of power they generate. Indonesia and the Philippines have backed a pilot programme by the ADB, which the bank says has the potential to be one of the biggest carbon reduction programmes in the world.

Indonesian Coal Export to European Union Country Soars Ahead of winter

Indonesia's coal exports to European Union countries had increased throughout September, which coincides with the upcoming winter season. The highest increase in coal exports was recorded for shipments to Poland.

Indonesia's cumulative exports in the period between January to September increased by 33.49 percent when compared to the same period the previous year to US$ 219.35 billion. Exports were supported by a 33.21 percent increase in non-oil and gas exports to US$ 207.19 billion.

Indonesia identifies 32 coal plants for possible early closure, minister says

Meanwhile, the largest share of non-oil and gas exports during the period between January to September comprises mineral fuels and fats, as well as vegetable animal oils. Mineral fuel has a value of US$ 39.88 billion or a 19.25 percent share

South Africa, Indonesia get $1bn to close coal plants

South Africa and Indonesia will receive a combined $1-billion from the Climate Investment Funds to replace some of their coal-fired power plants with renewable energy facilities, part of global efforts to cut planet-warming emissions.

The allocation of $500-million each to the coaldependent countries will come in the form of “concessional,” or low cost, finance, the World Bank-affiliated fund said in a statement.

In South Africa, the money will be used to close coal-fired electricity stations and replace them with renewable energy plants and battery storage systems, it said. Over the next eight years, South Africa needs $60-billion in investments to effect the transition” away from coal, Barbara Creecy, South Africa’s environment minister, said.

South Africa is also negotiating $8.5-billion in climate finance as part of an agreement with the US, UK, Germany, France and the European Union known as the Just Energy Transition Partnership.

Europe’s Coal Price Jumps as South Africa Strike Curbs Supply

The price of importing coal to Europe’s largest ports rose the most since May as a strike in South Africa curtails shipments of the fuel during the middle of an energy crisis.

South Africa’s troubles dovetail with those of European power producers, who are trying to

stock up on coal ahead of winter to make up for dwindling supplies of natural gas from Russia. Traders are relying increasingly on South Africa because European Union sanctions ban purchases from Russia, long the continent’s largest source.

Month-ahead European coal futures rose as much as 11%. They’re now trading at about $290 per ton, rebounding from an almost sevenmonth low on Oct. 10. The jump also may be driven by traders covering shorts or profit-taking after a long decline, Claude said.

Coal exports to Europe from a consortium that owns the Richards Bay Coal Terminal in South Africa increased to 4.1 million tons in the first half of 2022, compared with 500,000 tons a year earlier, Thungela Resources Ltd. Chief Financial Officer Deon Smith said in August.

Russian coal exports to energy-hungry China have jumped by about a third this year but the supply boom is being constrained by transport infrastructure limitations, industry sources and officials said.

The Kremlin plans to increase its energy supplies to Asia, China in particular, to offset a slump in exports to the West, which has imposed sanctions on Russia over the conflict in Ukraine.

Russia is the world's sixth-largest coal producer and one of top coal exporters, along with Indonesia and Australia. Its share of global coal exports reached 17% last year with supply of 223 million tonnes. But now with more exports heading east towards Asia as opposed to west towards Europe, bottlenecks are appearing.

Russian First Deputy Prime Minister Andrei Belousov has acknowledged the problem with infrastructure constraints, saying this

Infrastructure bottlenecks hamper Russia's booming coal exports to China

month that the situation with coal exports and congestion on the rail system had not stabilised, though it was improving.

Russian coal exports down,

tonne-miles up

The EU’s import ban began on August 10, 2022 and in the almost two months since, Russia’s coal export volumes were down 7% year-onyear and 5% year to date, the association said.

With the EU off-limits, Russia has had to look further afield for coal consumers, leading to a near-30% increase in tonne-mile demand, despite the lower volumes. The average haul for Russian coal has risen by almost 50% since sanctions were announced in April.

“So far, capesizes have seen the biggest increase in tonne miles following the ban, largely due to India’s increased interest in discounted Russian coal. India’s government mandated an increase in coal imports over the summer, due to a surge in energy demand and low coal inventories. This resulted in a boost to tonne miles as capesizes laden with Russian coal from European ports sailed around Africa,” says Filipe Gouveia, Shipping Analyst at Bimco.

approved reactivating several coal- and oil-fired power plants, and environmental activists warn that Germany risks defaulting on its climate goals by burning more fossil fuels.

Scholz said five further plants that use lignite, a low-quality and high-emission type of coal, have gone back online in recent days “as a timelimited but necessary emergency measure.” The chancellor this month also decided to keep Germany's last three nuclear power plants, which originally were supposed to be switched off at the end of the year, running until mid-April

Coal shipments to U.S. power plants fell by more than half between 2010 and 2021

U.S. power plants received 449 million short tons (MMst) of coal in 2021, less than half of the 957 MMst they received in 2010. Coal shipments to U.S. power plants declined over the past decade as coal-fired generation in the country fell and coal-fired power plants shut down.

Although coal shipments have been trending down over the past decade, 2021 shipments increased 5% from 2020 because coal-fired generation increased. In 2021, coal-fired generation rose for the first time since 2014 because of higher electricity demand and higher natural gas prices versus relatively stable coal prices.

German Chancellor Olaf Scholz said that Russia's war in Ukraine mustn't lead to a “worldwide renaissance” for coal — comments that come as Germany itself brings coal-fired power plants back online in an effort to prevent an energy crunch this winter.

In a speech to parliament, Scholz highlighted his government's efforts to counter the effects of Russia's decision to cut off gas supplies to Germany. The government has in recent months

A power plant’s location and the cost-efficiency of the shipping method primarily determine how it receives its coal. Minemouth coal-fired power plants—or plants that are built beside coal mines—receive coal directly from the adjacent mine, usually through a long conveyor belt. Minemouth shipments accounted for 8% of coal shipments to power plants in 2021, compared with 6% in 2010

German leader warns against 'worldwide renaissance' for coal

US based miner Arch redirecting coking coal into thermal market

US based coal miner Arch Resources is actively exploring opportunities to redirect coking coal to thermal markets, CEO Paul Lang said, as global prices of thermal coal continue to remain near historic highs. He said the group believed the fourth-quarter shipments could serve to garner further thermal market interest in its high BTU coking coal products.

The company has sold more than 200 000 t of metallurgical coal to thermal customers for delivery in the fourth quarter and COO John Drexler added in a conference call that Arch was working hard on identifying more crossover opportunities.

“We remain staunchly committed to serving the metallurgical needs of our longstanding steel customers, but we are also happy to redirect tons to thermal customers in the absence of more value creating alternatives in the steel arena,” Drexler said

Coal association opposes natural gas initiative

An initiative to push for natural gas rather than coal to aid European allies has drawn fire from the West Virginia Coal Association.

“Our European allies are struggling to acquire the fuel they’ll need for consumer home heating and industrial purposes,” he said. “They require all means necessary – coal, gas and intermittent sources – to power their economies for the foreseeable future. Calling for the eradication of coal is nothing more than a political hook on their part to incentivize gas pipeline development in America.”

The group of natural gas production and transmission companies, led by EQT, TC Energy and Williams Company, launched PAGE with the goal to “replace foreign coal with a reliable, affordable supply of cleaner U.S. natural gas,” Hamilton said.

Indonesian Coal News:

*Indonesia's coal exports to European Union countries has increased throughout September, which coincides with the upcoming winter season. Indonesia's cumulative exports in the period between January to September increased by 33.49 percent when compared to the same period the previous year to US$ 219.35 billion. While the highest increase in the mining and other sectors amounted to 91.98 percent. These non-oil and gas exports accounted for 94.46 percent of Indonesia's total exports. For Poland, coal exports from Indonesia increased by 95.47 percent. But in Italy, it has decreased by minus 4.31 percent.

*A climate fund has agreed to work with Indonesia to retire up to 2GW of coal-fired power over the next 5-10 years, under a pilot scheme to shift the country from coal to clean energy. The Climate Investment Funds’ (CIF) governing board has

approved Indonesia’s investment plan for how it will spend $500 million in concessional funding designed to unlock public and private investments to rid the economy of coal. However, phasing out coal would be difficult for Indonesia. The country is the world’s largest coal exporter. In 2021, the south-east Asian nation exported 441.5 million tonnes of coal, about a third of global coal exports.

Australian Coal News:

*A global rally in coal prices has been a boon for Australian miners of the commodity, potentially boosting supply from the world's No. 2 exporter of the fuel even as international efforts to cut greenhouse emissions gather pace. Australian coal producers such as Whitehaven Coal, Yancoal and New Hope Group have been able to tap surging demand, with

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the startling windfall gain prompting some miners listed on the Australia Securities Exchange to hand out hefty dividends, as well as buying back shares despite soaring stock prices.

*Supply chain and geopolitical issues are making Australia an even more attractive proposition for investment in the coal mining and resources sector according to financial experts. A major focus for investors right now is the mass-decarbonisation across the entire mining value chain, but global hurdles are slowing efforts and putting an emphasis back on cost-effective fuel such as coal.

South African Coal News:

*South Africa’s Coal Export to the EU has gone 582.7% during the January-September period in 2022. Export volumes from South Africa had steadily declined in the past decade, as it was penalized by declining coal demand in the Atlantic basin, the country’s distance from the more resilient East Asian markets, as well as limitations on output and railway and port capacity also had their impacts. In the first 9 months of 2022, South Africa exported 47.8 mln tonnes of coal, down - 1.0% y-o-y. However, Coal exports from South Africa to the European Union surged by 582.7% y-o-y in JanSep 2022 to 9.6 mln tonnes, from just 1.4 mln t in the same period of 2021.The EU is now again the second largest destination for South African coal after India, with a 20.0% share.

*South Africa’s cabinet has approved an investment plan for an $8.5 billion package to accelerate the country’s transition away from coal and towards clean energy. In a short statement, the cabinet said the plan outlines the investments required to achieve the decarbonisation commitments made by the government of South Africa while promoting sustainable development. The plan, expected to be published at next month’s COP27 climate summit, follows nearly a year of negotiations between the governments of South Africa and the UK, EU, US, France and Germany, which are contributing funds.

European Coal News:

*European coal prices will likely decline from this year’s elevated levels to below USD 250/t for much of next year as consumption declines and supply levels improve, according to analysis firm McCloskey. This was largely due to an anticipated decline in overall coal consumption, particularly for the world’s leading consumer China. China’s already on track to reduce their consumption by about 55m tonnes this year. There are also expectations of improved coal supply availability. This will mostly come from low CV suppliers like Indonesia. While Europe formerly imported 60-70% of its thermal coal requirements from Russia, it has since depended upon alternative suppliers such as South Africa, Colombia and even as far afield as Indonesia and Australia.

*Coal inventories at northwestern European ports have fallen by more than 5% during mid-October to their lowest point since late May as utilities increased withdrawals to inland storage. Combined inventories at four key terminals in Amsterdam, Rotterdam and Antwerp (ARA) were assessed at 5.91m tonnes, lowest since 30 May. This was down sharply from levels in mid-August, which had reached near threeyear highs of 7.17m tonnes.

US Coal News:

*U.S. coal-fired generation is declining in 2022 after a brief rise last year and is expected to drop by 6% compared to 2021, experts say. Although coal-fired generation declined each year between 2014 and 2020, it rose 16% in 2021 as a result of increased electricity demand and higher natural gas prices following the pandemic. This year, the share of natural gas in power generation is expected to grow by 1% to 38% despite its rising price. Coal production will increase by less than 2% during 2022, and much of that gain will be from exports. It is expected that the share of generation provided by coal will return to 20% in 2022, down from 23% last year.

*US coking coal exports fell to a seven-month low in August, largely because of lower shipments to China, while shipments to the rest of the world were higher than a year earlier but slipped from the

previous month on weakening sentiment in steel markets and declining steel output. Exports fell by 13pc on an annual basis and by 8.5pc on a monthly basis to 3.17mn t in August, as shipments to China were significantly lower than a year earlier as buyers continued to largely hold back from the seaborne market.

Shipping Update:

Pet Coke News:

*Petcoke prices have stopped their downward trend with huge discounts now attracting sellers from India and China. The high-sulphur (6.5 percent S) petcoke FOB contract is currently at US$131, with an expected trading range of US$115-145. Discounts for high-sulphur petcoke when compared with API4 coal have increased. The discount for 6.5 per cent Sulphur petcoke FOB sold at US$131 is at 64 percent when compared with 4Q22 API4 coal sold at US$295.

*The dry bulk market has failed to impress over the past few weeks in October, with the gloom now starting to translate to asset values as well. In its latest weekly report, shipbroker Allied Shipbroking said that it is a fact that conditions in the dry bulk market have been anything but stellar for some time now, with the overall market’s trajectory and sentiment being under considerable pressure. A prolonged state of clouded global macros, surging inflation rates as well as geopolitical shifts, have all contributed to triggering a series of new challenges in terms of market stability even on a short-term basis.

*Global freight volumes have begun to fall as overall consumer and business spending slows and the composition rotates from merchandise back to services after the pandemic. Slower growth in freight and manufacturing will ease pressure on supply chains and commodity markets, taking some heat out of inflation, currently running at the fastest rate for 40 years. The slowdown is a necessary part of the rebalancing process after exceptionally rapid growth in merchandise trade and output in the second half of 2020 and throughout 2021.

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